SM is fucked, I've seen a lot of complaining about it. I guess it was put in to avoid "twinks" having ridiculously good upgraded gear at low SL's through grinding. It ends up pretty much the same situation though. If you don't min-max how you spend your souls as efficiently as possible you are going to be at a disadvantage in match-making based on SM. The worst is probably for noobs and first timers, anytime they lose souls by dying repeatedly they are just that much less powerful compared to what their SM says they should be, and it's a vicious cycle from there.
